State may back workers’ mortgages

Cape Town - The government had committed itself to being the guarantor of the mortgages of South Africa’s 1.3 million public servants under a government housing scheme, Public Service and Administration Minister Lindiwe Sisulu said yesterday.

The agreement reached on Tuesday was being costed – the finance minister wants a rand-and-cents estimate before signing off – and then it would go to the cabinet for a final stamp of approval and, ultimately, to the public service bargaining chamber.

In an interview with the Cape Argus, Sisulu said: “We are still talking to the banks,” but agreement had been reached that the state would be the guarantor for mortgages as part of the government’s initiative to make decent housing accessible to public servants.

“So there is certainty – we are the collateral,” said Sisulu.

“Quite a number of people in shacks are working for government. It’s a very welcome breakthrough, and I am glad it happened.”

A deputy director-general to oversee the establishment of the required infrastructure for this government housing scheme has already been appointed.

The mortgage payments are expected to be deducted via Persal, the government salary system.

The housing scheme was part of the 2011 three-year public service wage agreement, and its signing off comes before a new round of wage negotiations, which is set to start after the May 7 elections.

With one in five employed South Africans working in the public sector, concern has been expressed by economists and others, including ministers, over the high public wage bill, now 38 percent of the R1.25 trillion Budget. - Cape Argus